Value and worth: probability analysis

Abstract

Purpose

The purpose of this paper is to consider probability analysis in the context of value and worth.

Design/methodology/approach

The paper explains the Data table, an inbuilt function of Excel (and Lotus 123), that allows the user to put a table on the input screen and tests the functions against a predetermined matrix of changing inputs.

Findings

The advantage of using a probability based analysis to test the variables is that it allows the user to get a better view of the possible outcomes, in this case the range of IRRs that may be achieved.

Originality/value

This paper looks at the usefulness of using data tables to predict different scenarios and outcomes.

Citation

French, N. (2006), "Value and worth: probability analysis", Journal of Property Investment & Finance, Vol. 24 No. 4, pp. 374-380. https://doi.org/10.1108/14635780610674543